Major indices bolted out of the gate largely on renewed fiscal stimulus hopes. Since then, the virtual duel hearing with Steven Mnuchin and Jerome Powell has been so politicized the rally has lost some steam.
It’s really a shame considering Congress has not acted in good faith in coming up with another fiscal push. The $3.3 trillion House bill was outlandish and insincere just as the notion of a so-called skinny bill is not broad enough.
Meanwhile, more economic data is showing the rebound is stalling.
November ISM Manufacturing:
- 57.5 actual
- 58.0 estimate
- 59.3 October
Manufacturing is still growing, but at a slower pace, as new orders and production saw large percentage point declines.
The red flag, however, comes from employment, which decelerated into contraction. This news, ahead of the jobs report, is problematic.
ISM Components | Index | % Point Change | Direction | Rate of Change | Trend* (Months) |
|---|---|---|---|---|---|
Manufacturing PMI® | 57.5 | -1.8 | Growing | Slower | 6 |
New Orders | 65.1 | -2.8 | Growing | Slower | 6 |
Production | 60.8 | -2.2 | Growing | Slower | 6 |
Employment | 48.4 | -4.8 | Contracting | Reversal | 1 |
Supplier Deliveries | 61.7 | +1.2 | Slowing | Faster | 13 |
Inventories | 51.2 | -0.7 | Growing | Slower | 2 |
Customers’ Inventories | 36.3 | -0.4 | Too Low | Faster | 50 |
Prices | 65.4 | -0.1 | Increasing | Slower | 6 |
Backlog of Orders | 56.9 | +1.2 | Growing | Faster | 5 |
New Export Orders | 57.8 | +2.1 | Growing | Faster | 5 |
Imports | 55.1 | -3.0 | Growing | Slower | 5 |
Construction Spending
The October read came in stronger than expected, as the housing boom continues to pace construction spending higher.
Private Residential
- $637.1 billion +2.9% month to month +14.5% year to year
Private non-Residential
- $456.6 billion -0.7% month to month -8.2% year to year
To see the chart, click here.
Great Start
This is a great start to December with all sectors higher lead by Financials. It would be impressive if the market could pick up early momentum to find a way to rally back toward intraday highs into the close.